A few answers to frequently asked questions on debt collection from a debtor standpoint. For more information on commercial debt collection services, go to www.brownandjoseph.com.

1. DEBT
COLLECTION
FREQUENTLY ASKED QUESTIONS
BROWN & JOSEPH, LTD.

2. When a debt goes into collections, it has most likely
already negatively impacted your credit score. When you
refuse to work with a collector, it can cause further
damage. If you are contacted by a collector, just
cooperate and pay or explain your situation.
It’s a collector’s job to resolve debt, so they are most
likely willing to work with you and figure out some
options for how you can pay the debt.
HOW DOES DEBT
COLLECTION IMPACT
MY CREDIT SCORE?
1

3. Bad debt is debt that doesn’t increase your net worth,
has no future value and that you don’t have money to
back for. Some examples of bad debt are auto loans and
credit cards.
Good debt is considered an investment that generates
long-term income or value.
WHAT IS BAD DEBT
VERSUS GOOD DEBT?
2

4. Debt consolidation is is taking out a loan in order to pay
off other loans. Basically, instead of having multiple
loans spread out, you would just have one big loan.
This may provide you with a lower interest rate, but you
will still be responsible for the entire amount of debt
owed.
WHAT IS DEBT
CONSOLIDATION?
3

5. Debt collection agencies collect delinquent debts of all
types: credit card debt, medical debt, automobile loan
debt, personal loan debt, commercial debt, student loan
debt and more.
Most collect agencies specialize in types of debt, like
commercial or consumer debt and within those types,
they will specialize with specific vertical markets to
create a more seamless process when working a
customer’s placements.
HOW DO DEBT
COLLECTORS WORK?
4

6. Often times, companies will hire debt collection agencies
to collect debt for them.
These agencies usually act as negotiators in collecting
and resolving past due amounts. Debt collectors are
skilled in quickly assessing the reasons for non-payment
and will work with the debtor to collect the past due
balance, remedy disputes and negotiate the most
favorable outcome for their client.
HOW DO DEBT
COLLECTORS WORK?
4

7. Agencies will also buy debt off of companies to collect –
once this is done, the company can no longer attempt to
collect a debt, as the agency now owns it.
HOW DO DEBT
COLLECTORS WORK?
4

8. Debt collectors’ jobs are to resolve debt, not just collect
it.They will work with you on payment plans and
recommend programs to assist you in paying off your
debt.
So, if you’re contacted by a debt collector, see what your
options are and what they can do to help. It’s best to
cooperate with collectors and try to explain your
situation.
I CANNOT AFFORD TO
PAY OFF THIS DEBT.
WHAT SHOULD I DO?
5

9. Collectors ask questions to ensure that they are speaking
with the correct person, and for privacy and security
reasons.
They may ask for information like your full name,
address, date of birth or other information to verify your
identity.
WHY DO COLLECTORS
ASK WHO I AM AND
TRY TO VALIDATE MY
INFORMATION?
6

10. If the amount of the debt seems higher than it should be,
it’s most likely because many contracts have provisions
for additional fees or charges when an account goes into
debt collections or charges off.
Pay the undisputed portion of the debt first, then speak
to the collector and provide any documentation you may
have to prove the correct amount.
THE AMOUNT OF DEBT
DOES NOT SEEM
CORRECT. WHAT CAN I
DO?
7

11. This can happen when the company you owe the debt to
changes its name or is acquired by another company.
However, you are still responsible for the debt.
If you still believe there has been a mistake, you can
speak to the collector and send any documentation you
may have to prove the debt is not yours.
I DO NOT THINK THIS
DEBT IS MINE. WHAT
CAN I DO?
8

12. There are several options for repaying debt.
If you can’t pay all the debt upfront, the collection
agency may accept a payment plan.
Otherwise, most agencies have an online payment portal
and accept credit cards, cash wire transfer or check.
HOW DO I PAY OFF MY
DEBT?
9

13. Generally, calls from debt collectors are excused from
the restrictions of the National Do Not Call list.
For more information, visit the Federal Trade Commission
website.
I AM ON THE NATIONAL
DO NOT CALL LIST.
WHY WAS I CALLED?
10

14. Other companies hire debt collection agencies to collect
for them, called third party agencies. Or, they sell their
debt to a collection agency, meaning the original creditor
no longer owns the debt.
Either way, the collection agency is contacting you for a
reason and you cannot bypass them.
The good news is, however, that most collection agencies
make it as easy as possible to pay back a debt and offer
several payment options.
CAN I PAY THE
ORIGINAL CREDITOR?
11

15. According to Investopedia, the Fair Debt Collection
Practices Act (FDCPA) is “a federal law that limits the
behavior and actions of third-party consumer debt
collectors who are attempting to collect debts on behalf
of another person or entity.”
In short, the FPCPA protects debtors from abusive, unfair
or deceptive debt collectors.
AM I PROTECTED BY
THE FAIR DEBT
COLLECTION
PRACTICES ACT?
12

16. The FDCPA only protects consumer debtors, not
commercial debtors.
Although there are currently no federal laws controlling
commercial debt collection, most states have statutes
which govern commercial debt collection.
AM I PROTECTED BY
THE FAIR DEBT
COLLECTION
PRACTICES ACT?
12

17. MORE QUESTIONS?
VISIT WWW.BROWNANDJOSEPH.COM
OR CONTACT:
DENNIS FALLETTI
EXECUTIVE VICE PRESIDENT
(847) 621-6121
DFALLETTI@BROWNANDJOSEPH.COM